- SEBI has prohibited mutual funds from investing in pre-IPO placements
- Mutual funds may invest only in anchor investor or public IPO portions
- SEBI issued a clarification to the Association of Mutual Funds in India
The capital markets regulator Securities and Exchange Board of India has stopped mutual funds from investing in pre-IPO placements, sources said.
Funds can invest only in the anchor investor portion or public issue of an initial public offering (IPO), sources said.
The clarification was issued to the Association of Mutual Funds in India (AMFI), the non-profit industry body of MF asset management companies registered with SEBI.
SEBI cited rules allowing investment only in listed or to-be-listed securities. This came after several funds sought clarity on whether pre-IPO placements qualify for investments.
SEBI warned that such investments could leave funds with unlisted shares if IPOs are delayed or cancelled, sources said.
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